Container supplier expects better times ahead

The newbuild container market is much better than it was a year ago, according to Christopher Lee, MD of the supply and conversion specialists, Container World. One dictating factor, he told FTW, was that the major container makers in China suddenly shut shop. “This,” said Lee, “because the main buyers, like shipping lines and leasing companies, just disappeared. “It was a no demand, no supply stand-off.” And that situation continues, with the manufacturers running off a few containers to meet momentary demand, then stopping once it’s fulfilled. All except reefers (refrigerated containers), according to Lee, where demand has fared better, although still well off the volumes of healthier times. At the same time, he complained about prices still being maintained, despite the slump. “Prices have not dropped much from the peak,” he said, “maybe 15%-20%. “This because there are only two major manufacturers in China – and they and their subsidiaries control 90% of the global supply market.” Some of these factories tried a bit of diversification, trying to target other uses of containers apart from cargo transport. “A bit like us,” said Lee, “offering converted boxes to the landside market. But their production line capacity is designed to produce big runs of standard boxes – so that didn’t get very far.” In Southern Africa, meantime, the domestic SA and regional landside markets have slowed down appreciably, according to Lee’s analysis. “Probably the biggest hit,” he said, “was the off-take for mining development. “That was temporarily put on ice. And, although the construction industry off-set that a little bit, it was only a slight easing. “But we’re seeing signs of it turning around – so the next six months should be better than the last six.” In summary, Lee noted that in the 2008-2009 period there was a very big demand and a matching level of supply. “But this,” said Lee, “faded out in about six months and the overall market contracted by about 40%. “It is, however, currently showing signs of having been somewhat stimulated – and some of those metaphorical green shoots are appearing.”